Gov. Scott Walker said Wednesday he is using "extreme caution" to avoid what he says could be contractual "landmines" costing taxpayers upwards of $100 million if he rushes to approve the Menominee tribe's proposed casino in Kenosha.

Walker offered his first public comments on the issue during a stop Wednesday in Green Bay.

The day before, Forest County Potawatomi confirmed it is withholding the tribe's annual casino revenue payment of at least $25 million to the state while talks continue about the additional gambling operation in southeastern Wisconsin.

The tribe asserts the state may have to refund its annual payments if Walker approves the new casino, which would compete with the Potawatomi's Milwaukee operation.

"They argue their compact that (former Gov.) Jim Doyle approved gives them the ability to stop those payments and actually go back in time and get about $100 million or more depending on how much they invoke in the process," Walker said.

"That would be a sizable hole" in the state's budget, the Republican governor said. "And I think when they suggest that, they're not kidding."

Walker is facing increasing political pressure from Democrats and labor officials to make a decision on the casino before the general election on Nov. 4, when he is on the ballot against Democrat Mary Burke.

Casino advocates held a demonstration Wednesday in Madison calling on Walker to immediately approve the proposed $810 million casino and Hard Rock Cafe. They said it would create 1,400 construction jobs, 3,300 direct permanent jobs and 1,800 indirect jobs.

Democratic lawmakers at the event said Walker, who is less than halfway from meeting his promise of creating 250,000 private sector jobs over his first term, should approve the casino to show he's serious about putting people back to work.

Democratic Assembly Minority Leader Peter Barca, right, talks in support of a proposed casino in Kenosha as laborers who could work on the $800 million project stand by in support in Madison.(Photo: File/AP)

"We've got a lot of people who haven't worked steadily in the construction trades," said Kenosha Mayor Keith Bosman. "It will put people back to work. It's good for the state of Wisconsin."

Unemployment in Menominee County was 18.3 percent last month, the highest of any county in the state. The city of Kenosha had an unemployment rate of 8.1 percent, and neighboring Racine had a rate of 11.3 percent.

But Walker said he needs more time to consider the potential impact of the casino on the state's budget. He pointed out the federal Bureau of Indian Affairs took nine years before approving the casino proposal a year ago. Walker has until Feb. 19 to sign off on it.

"We're going to take as long as we can legally take, assuming it takes that (long) to ensure we're not creating a big hole (in the state budget)," Walker said Wednesday.

Walker previously ordered an economic impact study of the proposed casino and has been working closely with the two tribes that oppose it —the Ho-Chunk and Forest County Potawatomi.

Walker said Wednesday he is not negotiating with the tribes but working through requirements already spelled out in existing compacts.

"What we're trying to do is walk through the landmines that Jim Doyle's compacts put in place," he said.

While talks continue with the Potawatomi, an agreement has been reached with the Ho-Chunk, Walker's top aide said in a memo released Tuesday by the governor.

Under the Ho-Chunk's current compact, its payments to the state would decrease by the amount it loses due to the Kenosha casino. The compact with the Potawatomi does not spell out as clear of a process, resulting in "substantial challenges," said Mike Huebsch, secretary of the Department of Administration in the memo.

—arodewal@pressgazettemedia.com and follow him on Twitter @AdamGRodewald.